Jane Street Faces Renewed Turbulence in Terra Insider Trading Lawsuit, Previously Hit with Heavy Regulatory Fine in India

Odaily News Quantitative trading firm Jane Street has recently been sued in the U.S. District Court for the Southern District of New York over events related to the collapse of the Terra ecosystem. The lawsuit alleges that Jane Street used non-public information to avoid over $200 million in potential losses before the Terra/Luna crash in May 2022. The plaintiff claims that Jane Street obtained significant non-public information through communications with Terraform Labs' engineering and business teams and executed large trades before the UST liquidity migration. Jane Street has denied the allegations, calling the lawsuit "baseless accusations."

The complaint reveals that on May 7, 2022, after Terraform Labs withdrew 150 million UST from the Curve 3pool, associated addresses quickly removed 85 million UST from the same pool, triggering a liquidity imbalance. The Terra ecosystem subsequently collapsed within a week, wiping out approximately $40 billion in market value.

The report notes that Jane Street had previously been targeted by the Securities and Exchange Board of India (SEBI) in a 105-page enforcement document, which accused the firm of using structural advantages in the local market to obtain abnormal profits. The current case involves a total of 13 charges, including insider trading, securities fraud, and violations of the Commodity Exchange Act, with some details still under seal. (Forbes)